he following diagram presents a circular flow model of a simple economy. The outer set of arrows (shown in green)…

he following diagram presents a circular flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs.
  
 
Based on this model, households earn income whenfirms  purchaseresources  in resource markets.
 
Suppose Susan earns $575 per week working as a doctor for the Medical Clinic. She uses $8 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Raphael $275 per week to wash cars. Raphael uses $125 to purchase medical services from the Medical Clinic.
Identify whether each of the following events in this scenario occurs in the resource market or the product market.
Event
Resource Market
Product Market
Raphael spends $125 to purchase medical services from the Medical Clinic.
 
 
 
blog

Related Articles

Don’t Miss Out!

20% OFF

Now, you can order your first essay at 20% off! To claim your discount, just use the discount code ESSAY25 and you will get 20% off the first essay!